11:46 20-09-2014
MAIN Russian
About us On-line subscription
KazakhstanTajikistanUzbekistanKyrgyzstanTurkmenistanWorld
POLITICSBUSINESSINCIDENTSSOCIETYCULTURESPORTANALYSISSCIENCE
India's new government unveils reform budget

Bishkek (AKIpress) - India's Narendra Modi-led government has unveiled incremental measures to boost capital spending in Asia's third-largest economy in its maiden budget, and reassured foreign investors that they will be treated fairly, the IBT reports.

The neutral budget, tabled in the lower house of Parliament on 10 July by Finance Minister Arun Jaitley, has raised the limits on foreign investment in defence and insurance sectors from 26% to 49% through the Foreign Investment Promotion Board (FIPB) route which makes sure investments undergo strong scrutiny.

However, the budget continued to prevent non-residents from assuming majority control in projects that can supply weapons to India, the world's leading arms buyer.

Retrospective Taxation

The budget said the government will constitute a high-level committee to review retrospective tax claims blamed for obstructing foreign investments into India, particularly after firms such as Britain's Vodafone were served with massive tax demands.

Jaitley sought to reassure investors by promising a stable tax regime and said the government will not "ordinarily" create new liabilities retrospectively.

He, however, stopped short of ditching the 2012 legislation on retrospective taxation.

Vodafone and India have been embroiled in a multi-billion dollar tax row for over six years, ever since the British firm acquired Hong Kong-based Hutchison Whampoa's Indian mobile assets in 2007.

Jaitley said that ongoing disputes over retrospective tax claims at various courts and "legal fora" will "naturally reach their logical conclusion."

The 2012 legislation overturned a Supreme Court judgment which dismissed Vodafone's tax demand earlier that year.

Deficit Target

Jaitley, in his budget speech, said he had "accepted" the "daunting" budget deficit target of 4.1% of gross domestic product (GDP) for the financial year ending March 2015. The 45-day-old Modi regime inherited the target from the previous Congress-led coalition government.

Dinesh Kanabar, Deputy CEO, KPMG India, said the finance minister's pledge to stick to a fiscal deficit target of 4.1%, against a backdrop of an oil crisis and poor monsoon rains, while 'commendable', appeared 'a bit ambitious'.

GST

Jaitley also said the government hopes to roll out a landmark tax reform to merge India's 29 states into a common market, by December 2014.

Jaitley added that New Delhi will be "more than fair" in its dealings with India's states about how revenue will be allocated under a new GST regime.

Economists have said that the proposed nationwide goods and services tax (GST) will boost revenue, while making it easier to do business in the sub-continent.

Shubhada Rao, chief economist, Yes Bank, said in a note: "Fiscal consolidation is a strong takeaway. The FDI in insurance and defence and the plethora of schemes for improving the rural economy with all round focus on development programmes, are a key thrust. It's a good beginning.

"For the 4.1% target of the fiscal deficit, the heavy lifting may be done by PSU disinvestment and non-tax revenue streams."

Dinesh Thakkar, chairman and managing director, Angel Broking, said: "...Infrastructure, real estate [and the] finance sectors were amongst the biggest winners, with measures to improve funding availability to infrastructure and low-cost housing and providing a boost to REITs and bank infra lending...."


Twitterfacebookprint
17:15 10.07.2014
LATEST NEWS
11:53 Central Bank registers 327 exchange offices in Kyrgyzstan as of July 3111:41 French jets strike in Iraq, expanding U.S.-led campaign against Islamic State11:35 Central Bank sets 50mln-som minimum authorized capital requirement for newly emerging microfinance institutions11:14 Upcoming autumn-winter period tough – Vice PM Dil10:54 Vice PM Sarpashev urges Chui government to hold talks with Gazprom on gas supplies to major consumers at wholesale prices10:34 Government orders China’s TBEA to prepare feasibility study for construction of Karakeche TPP10:20 Coal reserves in Karakeche deposit’s central part estimated at 40 million tons18:03 Students offer mayor Kulmatov to build three-level highway in Bishkek17:53 Ministry of Energy and Industry fails to prepare feasibilty study for creation of technology park in Kyrgyzstan17:47 Som one of most stable currencies among former Soviet Union countries – National Bank17:37 Bishkek mayor's office executes only 10% of planned activities in 2014, Vice PM says17:36 Protocol on cooperation of SCO RATS with competent authorities of Afghanistan, Iran, Mongolia signed in Dushanbe17:28 Over 40 tons of shabby banknotes destroyed annually in Kyrgyzstan17:26 Bishkek to host campaign within National Blood Donor Day17:26 Nazarbayev orders to create institute for protection of children's rights17:21 Murder 'comes naturally' to chimpanzees, study finds17:10 Ata Meken faction supports nomination of Melis Turganbayev for Interior Minister17:09 Finance Minister asks government members to be cautious with statements about 10% kickback, PM promises to provide facts of corruption17:07 Over 60 Chinese companies present their products at exhibition in Dushanbe17:04 Two more industrial zones to appear in Almaty region – governor
Astana
+12° C
Ashgabat
+27° C
Bishkek
+20° C
Dushanbe
+21° C
Tashkent
+23° C
exchange rates
 
69.76
54.18
8.79
1.41
234.13
181.95
29.63
4.73
6.40
5.00
0.81
0.13
3117.21
2359.56
384.37
62.66
3.67
2.85
0.46
0.07

© AKIpress News Agency - 2001-2014
Use of the AKIpress.com materials must be accompanied by a hyperlink to www.akipress.com
Our address:
Moskovskaya str. 189, Bishkek, the Kyrgyz Republic
e-mail: english@akipress.org, akipressenglish@gmail.com;
Tel/Fax: +996(312)90-07-75